Germany to urge business to loosen Iran links

Chancellor Angela Merkel’s government is to press specialist German engineering companies to reduce business in Iran, following pressure from Washington for Berlin to act more forcefully against Tehran’s nuclear ambitions.

Berlin is to target companies where Iran is reliant on German technology, legislators said on Wednesday, in a bid to prevent Tehran from being able to tap alternative suppliers in China or elsewhere.

The action – seen in Berlin as additional to the new sanctions being considered in the United Nations Security Council – is being co-ordinated with European partners, with the governments in France, Britain, Spain, Italy and Austria expected to take similar action towards their exporters, the legislators said.

Companies specialising in machine engineering, tunnelling, construction of power plants, and support work for the oil and gas sectors are to be pressed by the Economics Ministry or other government departments to reduce or end business in Iran. Government officials refused to comment and it was unclear on Wednesday night which specific companies would be targeted.

Around 1,700 German companies do business with Iran, according to one estimate, and Germany is the biggest exporter to the Islamic republic, with exports worth $5.1bn last year. Michael Tockuss, former head of the German-Iranian chamber of commerce in Iran, said last December that two-thirds of Iranian industrial companies rely on German products. Experts in Iran have also said that Tehran is reliant on German technology.

Germany has previously opposed bilateral or European sanctions on Iran, but this week Ms Merkel appeared keen to bend to US pressure if it increased the likelihood of a non-military solution to the Iran stand-off.

On Saturday she told US president George Bush at a meeting at his Texas ranch that Germany “will further restrict our trade [with Iran]”. On Monday she said after a meeting in Berlin with Nicolas Sarkozy, French president, that “we have discussed with each other, and with other European countries, that we each want to reduce to some extent our trade with Iran”.

Germany has refused to stop all export guarantees to German companies with ties to Iran, but has cut them significantly over the last two years.

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